Most small and midsize businesses in Fairfield County have a positive outlook regarding the economy and expect their businesses to continue growing this year, reflecting a national trend, according to JPMorgan Chase.
The New York-based company – whose local presence includes branches in Bridgeport, Danbury, Darien, Fairfield, Greenwich, Monroe, Norwalk and Stamford, among others – last month issued its annual Business Leaders Outlook report. Among its findings: 73 percent of midsize companies (defined as those with annual revenues of $20 million to $500 million) and 55 percent of small companies (those with annual revenues of $100,000 to $20 million) remain optimistic about the national economy, although those figures are down 16 points and 8 points, respectively, from a year ago.
Also, 91 percent of small and midsize companies plan to maintain or increase their capital expenditures. John Gambardella, the bank’s region director, middle market commercial banking, Connecticut, said the reasons for that included that 81 percent of midsize companies and 60 percent of small businesses expect their revenue and sales to increase in 2019, while 74 percent of the former and 58 percent of the latter expect to see higher profits.
“We’re seeing the same levels of optimism in Connecticut and in Fairfield County,” Gambardella said. “The key for us is to stay informed about where our clients are and to help them plan for the future, to take action. If you stand in place, especially with the national and even global competition that many of our clients face, then your competition is going to run past you.”
Pepper Anderson, managing director, private banking market manager, Connecticut, said a confluence of events was helping to drive optimism here, including the positive effects of the changes to the tax code embodied in the federal Tax Cuts and Jobs Act, signed into law on Dec. 22, 2017, and the fact that there is now single-party leadership in Hartford.
“There are a lot of individuals and business owners who think having one party in charge when it comes to policy issues means agreement is more likely – and that that will give them greater traction when it comes to moving forward,” she said.
Anderson said the bank is increasingly working with business owners looking to maximize what they can get out of the tax code reform and other recent developments like the establishment of opportunity zones.
“I had two clients recently purchase buildings in opportunity zones in Fairfield County,” she said. “They’re really interested in the opportunity they represent to expand their businesses in a brick-and-mortar kind of way, as well as the opportunity to get involved with them as investment opportunities.” She noted, however, that “there’s still a lot of regulatory information we need to get” before the OZ program can really take off.
As for tax reform, Anderson said her team had conducted a record number of analyses for clients – “three times the record,” she said, though exact figures were not immediately available – that included everything from estate plans and saving strategies to philanthropic goals and working in the most efficient manner possible with lowered corporate tax rates.
Among the report’s other findings: 66 percent of midsize companies plan to hire more full-time personnel and 80 percent plan to increase compensation in the next year. Small businesses rated 36 percent and 41 percent, respectively, on the same questions, while 54 percent of midsize businesses and 28 percent of small companies said they were “very” or “extremely” concerned about finding the right level and amount of qualified candidates to fill open jobs.
In addition, 75 percent of mid-size and 52 percent of small companies said they were already preparing to face disruptive technology changes and challenges, defined as something that displaces an established technology and shakes up the industry or is a groundbreaking product or service that creates a completely new industry.
Actions being taken to address those challenges include designating an in-house person or team to identify threats and opportunities, developing proactive countermeasures, collecting additional data for analysis, creating a contingency plan and implementing regular firewall testing.
Anderson said JPMorgan Chase regularly dispatches staff to clients’ offices to help them shore up their security and “tighten themselves up.”
A new report from Accenture predicts that, in the private sector, over the next five years companies face losing some $5.2 trillion in value creation opportunities from the digital economy to cybersecurity attacks.
Anderson said the bank is actively looking to expand throughout Connecticut, “which itself is a reflection of the optimism we see broadly across the state.”
A JPMorgan Chase spokesperson said the bank was prepared for the possibility of another partial federal government shutdown.
“At the start of the shutdown,” she noted, “we reached out to customers to offer help and automatically refunded checking account overdraft and service fees. We also activated our Special Care Line with a team of specialists who extended payments on customers’ car loans, provided 90-day relief on mortgages and removed minimum payments on credit cards, limiting the impact on credit reports. And we’re looking at ways to help small businesses, such as bridge loans for our customers seeking SBA real estate loans.”
The bank also committed $1 million to Feeding America and United Way Worldwide, which helps to provide meals, financial services, counseling and other assistance to federal workers and their families, she added.